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August 22, 2014

‘Internet of Things’ Beckons New VC Firm

A new investment company plans to support innovative technology that interconnects devices, brings the Internet to normal objects and automates everyday tasks

"There are so many things that can better your life” in an interconnected world, Mahn says.

Doors that lock with the touch of a button.

Fridges that order food for you.

Alarm clocks that signal the coffee pot to start.

It’s the interconnectedness of devices, the automation of everyday tasks — it’s the “Internet of Things.”

It’s The Brave LittleToaster come to life. And not only is it the future, but it’s already here, at least as an investing opportunity.

The just-launched Moonscape Ventures will focus specifically on investing in startups operating in the Internet of Things, smart cities, big data and media startups.

“We’re looking for the next big thing,” said Tammy Mahn, managing partner of Moonscape Ventures, in an interview with ThinkAdvisor. Right now the Internet of Things is mostly available to those with high-level access, Mahn said, but Moonscapes hopes to make it more available to the consumer.

“As the world gets connected and starts to sense you, there are so many things that can better your life,” Mahn said.

The $120 million investment company was launched Tuesday by global entrepreneur Mati Kochavi, whose existing network of companies includes smart city and Internet of Things solutions provider AGT International and Vocativ, a news organization that uses advanced technology to mine the Web for stories, trends and issues that are missed by conventional search engines.

Moonscape Ventures plans to make early-stage investments in new and innovative technologies related to the Internet of Things, including smart cities, big data and news and media technologies. First round investments will range from $500,000 to $5 million.

While the “Internet of Things” is the most recent buzzword for this machine-to-machine technology, Mahn says the technology has been around for a while.

“The connected world was there a decade ago,” Mahn said, adding how she sees companies pitching an idea as the “Internet of Things” when they’re really just jumping on the latest buzz. “There’s no way we can avoid buzzwords but we really try to go deeper.”

Moonscape will look for companies with substance that will make a difference. Mahn asks, “Are you really solving something? Are you taking it to the next level?”

Its first investment is $3.1 million in startup SocialStudios, whose technology uses social media data to automatically create and curate personalized video content. Vocativ will be the first company to use SocialStudios' technology to build a personalized video platform enabling its users to view content highly tailored to their interests and those of their close social circles. Now in beta, SocialStudios will be incorporated in the Vocativ offering this fall.

Mahn said Moonscape has “two more investments that we think we’ll close in the next month” that will be more aligned with Moonscape’s broader vision to bring the Internet of Things to the consumer.

Moonscape says it will offer not just funding, but also a slew of resources to help budding companies.

“Unlike the traditional funds, we have a pool of experts,” said Mahn, who has worked for more than a decade in the venture capital industry at global firms Hamilton Lane, Pitango Venture Capital, Evergreen Venture Capital and McKinsey Consulting.

The addition of Moonscape Ventures to Kochavi's existing group of companies will give the companies that Moonscape works with access to the engineers, scientists and technology already in Kochavi's network. They will also have the opportunity to partner with Kochavi's companies, like AGT and Vocativ, and work with existing customers and projects around the world.

Moreover, Mahn adds “they can get that experience in a sheltered environment.”